Page profits dive in 'difficult' market

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Michael page, the UK's second largest recruitment agency, saw profits fall by 49 per cent to £43.2m in the first half of the year as recession continued to hammer the employment market.

Revenues dropped by 27 per cent to £365m in what the company yesterday called "extremely difficult market conditions". Only by drastically reducing costs – including cutting staff by more than a third and closing 21 offices – has the group remained profitable in the first six months of the year.

The outlook for the third quarter is little better, and although there are indications that the UK economy is stabilising there are not yet signs of recovery. Steve Ingham, the chief executive of Michael Page, said: "We anticipate a challenging third quarter as we enter into the seasonally quieter summer period, both in Continental Europe, which was later into the downturn, and in the UK."

Despite the economic woes, the company is maintaining its interim dividend at 2.88p per share, the same level as last year, and plans to expand its geographical range. Mr Ingham said: "We remain confident that we can maintain our market presence, continue to gain market share and are well positioned for growth when economic conditions improve."

In the UK, which represents nearly a third of Michael Page's profits, revenue was down by 27 per cent to £138m and gross profit fell by 40 per cent to £57m. The months from January to June were tricky in all areas and across all types of business, the recruiter said. Permanent recruitment is suffering more than the temporary sector, but is expected to recover faster as the economy rebounds.